GOP sets sights on reshaping reform

An all-out assault on government-sponsored loan enterprises, increased oversight of regulatory agencies and retooling the Wall Street regulatory overhaul are on tap if the Republicans retake the House.

GOP lawmakers — looking forward cautiously at leading the House Financial Services Committee in a Republican majority — are planning a slew of hearings delving into past practices and potential changes to Fannie Mae and Freddie Mac, the two federally backed lenders that many consider to be a root cause of the housing meltdown.

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Leading Republicans on the committee — including California Rep. Ed Royce, Texas Rep. Jeb Hensarling and New Jersey Rep. Scott Garrett — also say the panel will significantly ramp up oversight of agencies like the Securities and Exchange Commission in the wake of Democratic financial services overhaul, which they believe gives the regulators too broad authority over markets.

But unlike Republicans’ pledges to repeal the health care reform law, the party is not looking to wipe off the books the financial services regulation law penned by Senate Banking Committee Chairman Chris Dodd (D-Conn.) and House Financial Services Committee Chairman Barney Frank (D-Mass.). To do that would create more uncertainty for the markets, so, instead, it will aim to defund “portions of it,” Hensarling said.

If the House majority flips, a newly revamped financial services committee is likely to begin its work soon after a Republican majority is installed. That’s because there isn’t likely to be a tussle amid the committee’s three top Republicans over who takes the gavel from Frank.

People close to House Minority Leader John Boehner (R-Ohio) have indicated that he will support the current ranking member, Alabama Rep. Spencer Bachus, and Hensarling and Garrett have signaled support for him. Royce stops short of coming out forcefully for the Alabaman, although GOP insiders say it’s unclear if he would launch an aggressive challenge to Bachus.

“I’m focused entirely on getting the majority in the House,” Royce said in an interview with POLITICO. “Unless we do, Barney Frank is the chairman. And I believe that we need different leadership than the leadership that Chairman Frank has given to the committee. But I’m going to focus after the election on these other questions, in terms of any position in the House.”

Bachus was not available for an interview by POLITICO, but he issued a statement saying, “We have not conducted any meaningful oversight” under Democratic leadership.

“The administration will no longer receive a pass when it comes to aggressive oversight of their failed economic policies, and that includes extensive review of all the job-killing provisions in [the Dodd-Frank Wall Street Reform and Consumer Protection Act],” he added.